A secret slice of the $6 billion

Whatever your position on Tuesday’s election results, this cannot be disputed: 2012 has been a great year for big money in politics, and an even greater year for secret big money in politics.

At least $213 million for which no source has been identified has gone into independent campaigns for the presidential and congressional candidates, according to Sunlight Foundation estimates, with about $4 going to Republican candidates for every $1 going to Democrats. Thanks to several Supreme Court rulings, organizations that proclaim themselves "social welfare" groups that provide "public education" don’t have to identify their donors; they’re more commonly known by their tax status: 501(c)(4). In recent years, many such groups -- the best known of which is Karl Rove’s Crossroads GPS -- have been busily educating the public about everything that’s wrong with the candidates and causes they don’t like.

But the partial unravelling of one supply chain of secret money over the past week has exposed just how convoluted, and possibly criminal, this form of campaign finance has become. The story begins with an $11 million anonymous contribution to a right-wing California organization, the Small Business Action Committee, which campaigned against Proposition 30 -- Gov. Jerry Brown’s ballot measure to raise taxes on the wealthy to keep California’s K-12 schools and public universities from making draconian cuts -- and for Proposition 32, which would hamper unions from spending money on politics.

Even by California standards, $11 million is a lot of anonymous money. Under widespread pressure to disclose the donor, the Small Business Action Committee said it had gotten the cheque from Americans for Responsible Leadership, an Arizona-based group unknown to most politically sentient Arizonans. And as a 501(c)(4), Americans for Responsible Leadership claimed, it didn’t have to tell anyone where it had gotten the $11 million.

California law, however, bans anonymous donations for or against state ballot measures. The state Fair Political Practices Commission took Americans for Responsible Leadership to court, and last week a California judge ordered the Arizona group to identify the donor. A state appellate court upheld that ruling, and on Sunday, the California Supreme Court -- composed chiefly of justices appointed by Republican governors -- ruled unanimously that Americans for Responsible Leadership had to identify its donors by the next morning.

At that point, the group’s attorneys decided not to appeal to the U.S. Supreme Court, as they had previously pledged to. Instead, they released the name of the donor: yet another 501(c)(4), the Center to Protect Patient Rights, run by Sean Noble, a longtime associate of the billionaire Koch brothers. And where did the Center to Protect Patient Rights get its donation? From the Virginia-based group Americans for Job Security -- still another entity whose tax status enables it to avoid disclosing the identity of its donors, at least in federal elections.

If you’re keeping score at home, that’s four levels of concealment. California’s Fair Political Practices Commission is still pursuing the source of the donation and hasn’t ruled out further civil or even criminal action.

The most interesting aspect of all this unravelling, however, is the decision by the campaign groups’ attorneys not to appeal to the U.S. Supreme Court. If they had, the case would have gone first to the justice with jurisdiction over California: Anthony Kennedy, the driving force behind the 2010 Citizens United decision that allowed a flood of corporate money into elections. But Kennedy has also defended the need for disclosure of campaign contributions. Indeed, he wrote in the Citizens United ruling that "prompt disclosure of expenditures can provide shareholders and citizens with the information needed to hold corporations and elected officials accountable for their positions and supporters."

Bizarrely, Kennedy’s opinion seemed to assume that such disclosure provisions were already in place. Confronted with a unanimous decision from the California Supreme Court requiring donors to make the very disclosures that he had extolled, Kennedy might have set the U.S. Supreme Court on a course toward mandatory disclosures -- thereby undermining a centrepiece of the Republican electoral machinery. (A bill mandating such disclosures came before the Senate in July, and though it had majority support -- 51 Democrats voted for it, and 44 Republicans against -- it failed to garner the 60-vote supermajority on which the Republicans insisted before allowing it to move forward.)

Given the balance of power in the other two branches of government, it’s up to the court -- and in particular, swing Justice Kennedy -- to drive secret money out of American democracy. If he doesn’t, that still-unsourced $11 million may look like chump change by the midterm elections of 2014.

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